SAN DIEGO — Imed, the San Diego-based manufacturer of intravenous drug equipment, said Wednesday that it plans to expand its manufacturing and assembly operations in Tijuana and to add up to 500 workers there over the next few years.
Attracted by lower labor costs, Imed is one of several medical products companies that have moved or expanded operations in Baja California over the past few years. Among them are Baxter Travenol; Cutter Biological, a unit of Miles Inc.; Sherwood Medical Co., a unit of American Home Products, and Kendall Co., a division of Colgate-Palmolive.
A subsidiary of publicly held La Jolla-based Fisher Scientific Group, Imed currently employs 700 workers in San Diego, 350 at a plant in the Republic of Ireland and 100 in Tijuana. The expansion in Mexico will not cause layoffs of U.S. employees, Imed said Wednesday.
Imed began assembly operations at a plant in Tijuana in 1986 through a labor subcontractor. Imed uses the plant for the labor-intensive assembly of disposable plastic tubing and bags used in administering intravenous drugs.
To accommodate the planned expansion, Imed has leased a 41,000-square-foot building in the Mesa de Otay area east of downtown Tijuana and will move in during the next month. The company said it expects to add up to 500 workers within a two- to five-year period.
With estimated 1987 sales of $115 million, Imed controls about 40% of the intravenous fluid device market, analysts say.
Raymond Zack, Fisher's managing director of operations, said there is a chance that some manufacturing and assembly operations of Fisher's other two subsidiaries, Fisher Scientific and Instrumentation Laboratory, might also be brought to Mexico in the future.
The Imed disposable products that will be assembled in Mexico will be new ones for Imed, Zack said. The high cost of the "handiwork" they require makes them prohibitively expensive to produce in the United States, Zack said.
"The only way we could have done these products here was by automating. But the capital costs of that were excessive in terms of the volume available," Zack said. "Opening an operation in Tijuana was cheaper."
Tony Ramirez, vice president of Made in Mexico Inc., a Chula Vista, Calif.-based company that consults with U.S. companies moving operations to Mexico, said electronics companies once were the dominant category of U.S. companies looking to locate in Mexico.
Now, although electronics companies still lead the migration, Ramirez said he sees a wider range of businesses--from medical products to furniture and jewelry assemblers--building manufacturing plants in Mexican border towns. These plants near the border, called maquiladoras, produce goods for the American market with cheap labor and then ship the products back to the United States.
"U.S. electronics companies have been accustomed to manufacturing internationally, particularly in Pacific Rim areas," Ramirez said. "But the decline of the dollar has made Mexico much more competitive and attractive."
Ramirez said there are roughly 400 foreign manufacturers with maquiladora operations in Tijuana, up from 230 in mid-1986. Mexicali, which is located 120 miles east of Tijuana across the U.S. border from El Centro, Calif., has about 150.
Baxter Travenol, based in Deerfield, Ill., is probably the largest medical products manufacturer in Baja California with a plant employing 800 in Mexicali, spokesman Phil Smith said Wednesday. By the end of 1988, Baxter will have added another 800 employees to its Mexicali plant where disposable products for urological and respiratory therapy products are made.
Cutter Biological, a Berkeley-based unit of Miles, employs 60 at a Tijuana plant.